Ethereum is a decentralized blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. It is open-source software. Ethereum was conceived in 2013 by programmer Vitalik Buterin.
Believe it or not, the much-awaited Ethereum ‘Dencun’ upgrade has finally been finalized, marking a huge step towards reducing the data storage costs on the Blockchain. This milestone introduces the “proto-danksharding” concept. A fairly new concept of a space carved out on the Ethereum Blockchain. This segregated…
Ethereum, better known as Ether (ETH), has seen an over 20% surge against Bitcoin (BTC) since February 12. This impressive upturn is catapulted by the news surrounding a prospective approval of a spot Ether exchange-traded fund (ETF) in the United States this coming May. However, as…
Even after recently hitting the $4,000 (£3,130) mark, Ethereum remains the second largest Digital Currency by market cap right after Bitcoin. Indeed, a beacon of Cryptocurrency. In light of the 2024 Ethereum Upgrade, it’s important to understand how to buy Ethereum. Ether (ETH) functions as a Digital…
“Technology upgrades do not automatically change economic realities.” — DNA Crypto.
Since its inception in the financial markets, cryptocurrency has fundamentally changed our perception of them. Together with blockchain technology, cryptocurrency is reshaping financial markets worldwide.
They are also being adopted across industries such as manufacturing and healthcare. The main aim of the crypto world is to reduce the complexity and security risks associated with traditional financial transactions.
Bitcoin was the first cryptocurrency and remains the world’s most significant crypto asset. Ethereum was invented back in 2011. It was created with fully decentralised software that enabled other decentralised applications to be built on top of it. Today, Ethereum is the world’s second-largest and most famous crypto.
Its ability to operate as both a currency and technology has brought it to the centre of everyone’s attention. Ethereum developers have taken further steps by releasing an update to the 2011 Ethereum version, known as Ethereum 2.0. This article will briefly highlight what to expect with this new update.
As mentioned earlier, Ethereum 2.0 is an update to the initial Ethereum developed in 2011. It is designed to improve on issues such as scalability, speed and efficiency. Ethereum 2.0 is designed to operate effectively as transaction volume increases. Other names conjured to refer to Ethereum 2.0 include Serenity and ETH2. It has undergone significant structural and blueprint changes, making it very different from its predecessor.
Initially, Ethereum operated on a consensus mechanism known as proof-of-work. However, ETH2 will use a different consensus mechanism, proof-of-stake. Let’s briefly highlight the main changes in Ethereum 2.0.
This is the process of dividing a Blockchain into several parts. In Ethereum 2.0, several blockchains in the network are known as shards. Using this process, the network operates as a single validator, handling all workloads from a single entity.
Each shard stores data and is managed by a single validator. In ETH2, the validators are mixed to avoid manipulation and redundancy. A chain known as the Beacon chain enables shards to work together.
The proof-of-stake method uses validators rather than miners, as in proof-of-work. Like miners, validators are also awarded tokens for adding blocks to the blockchain.
Ethereum 2.0 has introduced more effective features to the crypto space. By addressing scalability, ETH2.0 will significantly reduce congestion in Ethereum and other cryptocurrencies.
Image Source: Adobe Stock
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
“Protocol upgrades change mechanics, not incentives.” — DNA Crypto.Enough Speculation as Ethereum 2.0 is Set to Launch in September Ethereum’s move to proof-of-stake may still be at the dock. Preston Van Loon, the Ethereum core developer, announced to a panel that the move would enter its final stages in the next three months. He said that September was the most reasonable timeline for the move. Justin Drake, a panel member, expressed a strong desire to make it happen by September. Justin and Preston have repeatedly referenced the “difficulty bomb” in this context; they are referring to the event known as The Merge. A Merge is the process by which the proof-of-stake beacon chain is merged with the existing Ethereum blockchain. Hence, the Ethereum network will shift from mining-based to staking-based. Individuals with high-performance supercomputers operate a mining-based network to earn Ethereum. On the other hand, staking is when Ethereum users deposit coins to earn rewards. It is important to note that the core developers didn’t choose September randomly. In May, Ethereum Core developers agreed not to upgrade the network to delay the Merge, which will begin to destabilise the network. The Merge is a blockchain constituent that deliberately slows the network. Its main intention was to drive the move to proof-of-stake among developers and to ensure miners found it challenging to remain behind once the initiative was launched. Although it is still in the testing phase, Ethereum Core developers have chosen to give it their full attention. If completed smoothly, the Merge would render the difficulty bomb useless. Both proof-of-work and stakeholder incentives aim to ensure the network is not only secure but also decentralised. However, proof-of-stake offers more advantages than proof-of-work. Proof-of-stake, for example, uses significantly less energy while also making it easier for individuals to run a network. Therefore, proof-of-stake is more secure and decentralised than proof-of-work. However, the primary reason Ethereum holders worldwide are waiting for the Merge is that it reduces Ethereum issuance by up to 90%. Fewer issuance means the demand outweighs the supply; thus, the coin’s price skyrockets. Currently, CoinMarketCap data show that a single ETH coin is worth about $2,000. The Merge is expected to push Ethereum to its highest price, surpassing its November 2021 price of $4,891. Signs of proof of stake could be seen as early as December 2020, during the completion of Phase 0, referred to as “Ethereum 2.0, which is a set of renovations to scale the network and make it safer. However, at that time, it was simply a beacon chain. It was a proof-of-stake network, but it could not be relied on to perform any function. Therefore, holders can only lock their Ethereum coins into it in hopes of future profits; however, The Merge will change that. Ethereum 2.0 is not the network’s final upgrade. A key component of Ethereum 2.0 is sharding, a strategy that enables the Ethereum network to be subdivided into multiple chains. According to the Ethereum Foundation, authenticators will only be required to validate data for the entity (shard) they are validating, rather than the entire network. The foundation adds that this strategy will significantly and immediately reduce hardware requirements. Image: Adobe Stock Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
